Archive for the ‘Demographics’ Category

Automation can mitigate for a population decline

September 17, 2017

The cold hand of demographics cannot be denied. Global population will begin to decline soon after 2100. The real question is whether an implosion can be avoided, economic decline can be held at bay and that an irreversible death spiral can be avoided.

For over 100 years it has been the threat of unsustainable population explosion which has exercised the minds of governments and policy makers. There are still many people who have spent their lives confronting this problem and cannot adjust to the new reality. This reality is that fertility rate is declining across the world. There is nowhere in the world where the rate is not declining. There are still many countries where the rate is greater than the 2.1 children per woman needed to just hold the population constant.

(From the World Population Prospects 2017)

Soon after 2100 population will begin to decline everywhere across the world. In many countries population decline is already well established. Population decline is compounded by  increasing longevity and a decline in the ratio of working population to aged population. Declining (and ageing) populations threaten the start of a downward death spiral of economic decline.

John Maynard Keynes in a lecture in 1937  “Some Economic Consequences of a Declining Population.” Keynes eugenrev00278-0023

“In the final summing up, therefore, I do not depart from the old Malthusian conclusion. I only wish to warn you that the chaining up of the one devil may, if we are careless, only serve to loose another still fiercer and more intractable.”

The point is that this decline is inevitable. Demographic trends cannot be denied over a matter of 2 or 3 generations. Hopefully the decline will be slow and allow time for corrective actions – provided however that irreversible economic decline does not set in.

Mitigation by automation

The critical parameter will be whether total GDP can be maintained at a level to allow the per capita GDP to be increased or, at least, maintained in spite of a declining labour force.

For the past 500 years (perhaps more), economic activity has been consumer driven and with a surplus of labour always available. Labour and its ready availability was in itself also the capital to be employed. Growth has been achieved by the increase of production exceeding the growth of population. Agricultural production before the industrial age was primarily a function of the labour available. With the advent of the industrial age, the link between labour force and production remained strong but industrialisation allowed an enormous productivity increase. It is the introduction of industrialisation into agricultural production which has also allowed the rapidly increasing population to be fed. However the last 6 or 7 decades has seen the industrial age morph into the age of automation. Automation is now gathering pace. Growth is no longer as dependent upon the availability of labour as it was.

With population declining it is likely that GDP will – in the long term – also decline. Production cannot happen without consumption. However ii is not necessary that the total GDP decline must exceed the decline of population. In the short term there may well be an increase of per capita consumption (and of per capita production). The question becomes how to maintain production with a decreasing work force available. But this is a question that all commercial enterprises face already. In the last 60 – 70 years, reducing work force and increasing automation has become a standard method of reducing cost and increasing productivity.

Within two decades I expect that driver-less vehicles, pilot-less aircraft, army-less wars will be common place. Robot diagnosticians, AI assisted surgeons and teller-less banks are already here. Idiot-less politicians would be nice. The bottom line is that the paradigm that more employees means more production is broken.

Automation has already progressed to the level where just the availability of a young work force is no longer a guarantee that production will (or can be made to) increase. The unemployment level of the less-educated youth of the world is testimony to that. Clearly if automation eliminates the need for human labour for all routine, repetitive tasks, then it also becomes necessary to occupy these young with years of further education. Together with a population living ever longer, the dependency ratio (ratio of non-working to working population) will obviously increase and increase sharply. For a government this can be a nightmare. Revenue generation is from the working population and large chunks of revenue consumption is for the education of the young and the care of the elderly. But that is also because tax revenues are so strongly dependent upon taxing the labour force. If the dependence of production upon the labour force is weakened (as it must be with increasing automation), and since production must eventually match consumption, then the entire taxation system must also tilt towards taxing consumption and away from taxing human labour for its efforts. (Taxing production is effectively also a tax on consumption because production which is not for consumption is not sustainable). Increasing automation also breaks the taxation paradigm.

It seems to me therefore, that a population decline is not something to be afraid of. It is imperative that the decline not be allowed to become an implosion. However a slow decline starting soon after 2100 can be managed. It is going to need over the next 100 years

  1. immigration to mitigate fertility declines,
  2. increasing automation across all manufacturing
  3. increasing use of AI across all fields
  4. increasing education (perhaps mandatory to the age of 25)
  5. increasing opportunities for entrepreneurs (including aged entrepreneurs)
  6. shifting away from income or labour related taxes and towards consumption tax

I can see population developing to “hunt” for a stable, sustainable level at perhaps around 9 – 10 billion with increases coming when new world are opened up to colonise. Pure speculation of course, but as valid as anything else.

Population decline is not something to be afraid of. The next 100 years will be fascinating.


 

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Fewer children under five dying than ever before

September 16, 2017

The 2016 GBD study is out at The Lancet.

The Global Burden of Disease Study (GBD) is the most comprehensive worldwide observational epidemiological study to date. It describes mortality and morbidity from major diseases, injuries and risk factors to health at global, national and regional levels. Examining trends from 1990 to the present and making comparisons across populations enables understanding of the changing health challenges facing people across the world in the 21st century.

One section deals with Mortality, and of major significance is the deaths of children (< 5 years). Around 4.6%  – 340 million – of the worlds population of 7.5 billion is under 5 (UN World Population Prospects 2017). Death is becoming the preserve of the old – as it should be. In the last 50 years, death has shifted decisively away from children to the aged.

 

About 5 million recorded deaths in 2016 were of children under 5 and had reduced from about 16 million in 1970. In that time the total number of children <5 has doubled. In 2016, deaths of children < 5 has reduced to one-sixth of the proportion in 1970. Almost two-thirds of all deaths are now at ages above 50 years. There are, for the first time, more deaths at ages above 75 than between 50 and 74 and, it would seem, is poised to increase sharply.

About 40% of the world’s population (60% in Africa) is now under 25 years old. The vast majority of them will live to see 75.


 

Global population will likely start reducing by 2070

July 19, 2017

The alarmist meme of a global population explosion leading to catastrophic depletion of resources and mass famines was already obsolete 20 years ago. The alarmism reached its peak in the 1970s and 1980s  (peak oil, peak food, peak water, peak resources ….). At least the panicky stridency of the alarmism about a population explosion has long gone (though it has now shifted to become panicky stridency about catastrophic global warming).

The 2017 Revision of the UN World Population Prospects is now available.

  • the world’s population reached nearly 7.6 billion in mid-2017. The world has added one billion people since 2005 and two billion since 1993. In 2017, an estimated 50.4 per cent of the world’s population was male and 49.6 per cent female.
  • the global population is expected to reach 8.6 billion in 2030, 9.8 billion in 2050 and 11.2 billion in 2100, according to the medium-variant projection

However the projections are very sensitive to fertility rates and their development – especially in Africa. Actual fertility rates have always tended to be below UN projections of fertility.

In the 2017 review, the sensitivity to fertility rate is highlighted;

  • Future population growth is highly dependent on the path that future fertility will take, as relatively small changes in the frequency of childbearing, when projected over several decades, can generate large differences in total population.
  • In the medium-variant projection, it is assumed that the global fertility level will decline from 2.5 births per woman in 2010-2015 to 2.2 in 2045-2050, and then fall to 2.0 by 2095-2100.
  • fertility levels consistently half a child below the assumption used for the medium variant would lead to a global population of 8.8 billion at mid-century, declining to 7.3 billion in 2100.
  • fertility has declined in virtually all regions of the world. In Africa, where fertility levels are the highest of any region, total fertility has fallen from 5.1 births per woman in 2000-2005 to 4.7 in 2010-2015. Over the same period, fertility levels also fell in Asia (from 2.4 to 2.2), Latin America and the Caribbean (from 2.5 to 2.1), and Northern America (from 2.0 to 1.85). Europe has been an exception to this trend in recent years, with total fertility increasing from 1.4 births per woman in 2000-2005 to 1.6 in 2010-2015. Total fertility in Oceania has changed little since 2000, at roughly 2.4 births per woman in both 2000-2005 and 2010-2015.

As with Asia, I expect that the decline of fertility in Africa will accelerate with development and GDP growth. If global fertility turns out to be as much as 0.5 children/woman less than the medium assumption, global population will start declining already by 2050. It may not happen quite that fast but it is now very likely that the decline will have begun by 2070. By the end of this century global population may not be much more than it is today.

It is only a matter of time before the alarmists start getting panicky and strident about the impending population implosion.


 

A shortage of children in Japan

April 23, 2017

The challenges of population implosion will be quite different to the challenges of growing populations. Japan is facing most of these challenges earlier than the rest of the world, but what Japan faces in the next 50 years will also be faced in Europe in about 20 years, by China in 70 years and in India in about 100 years.

The challenges of an aging population are receiving much attention as the ratio of working population to supported population declines. But what receives less attention is the upheaval being caused in Japan by the sharp decline in the number of children.

From a peak of just under 30 million children (0-14 year olds) in 1955, the number has been declining. By 2050 there will be only about 10 million children in Japan. Rural schools are already being abandoned for lack of children. That in turn leads to long commutes for the children still living in rural areas. Commutes of 50km, each way, are not so rare.

QuartzMedia: About 5,800 public school buildings closed between 2002 and 2013, according to data from the Japan’s education ministry. By rights, many more schools should close for lack of students. But they remain in existence because no one can think of anything better to do with them. Of those that have closed, a few hundred have been demolished and about 1,500 schools were still on the books in 2014 in need of a new purpose, according to ministry data.

It is not just schools of course. Numbers of teachers, demands for teacher training places, school meals suppliers, uniform manufacturers and even school bus manufacturers are all facing shrinking demand. Demand for higher education places lag school places by about 15 years. Some Universities are reducing their entry requirements to fill the places they have.

Japan is among the first to face these challenges and how they cope is going to be watched with great interest.

That they will cope is not in doubt. But how they cope will provide many of the solutions that the rest of the world is going to need.


 

 

Population implosion after 2100?

March 19, 2017

One picture which is self-explanatory.

(from Our World in Data)

the rate of growth peaked in 1962 and has since been on the decline. The following visualization presents this comparison by superimposing the annual population growth rate over the total world population for the period 1750-2010, as well as projections up to 2100. In the projections you can see that by 2100, the growth rate is estimated to fall to 0.1%.

After 2100, population growth will be negative and it will be the population implosion that will be the challenge of those times.


 

Fertility rates increasing in Eastern Europe but still below replacement level in all European countries

March 9, 2017

Eurostat has released fertility statistics for 2015.

Birth rates in Eastern Europe countries, since 2001, are rising fastest, though from very low levels. Birth rate also increased strongly in Sweden over this period.

Overall fertility rates are well below the replacement level and immigration is necessary to prevent a population implosion and an unsustainable ratio for supported population/working population. Eastern Europe is most resistant to immigration and is particularly vulnerable. Even though fertility rates have risen significantly, they are still among the lowest in Europe.

The age of women having their first child is also increasing (29 years) but surprisingly, is highest in Italy and Spain (31 years).

In 2015, 5.103 million babies were born in the European Union (EU), compared with 5.063 million in 2001 (the first year comparable statistics are available).

Among Member States, France continued to record the highest number of births (799 700 in 2015), ahead of the United Kingdom (776 700), Germany (737 600), Italy (485 800), Spain (418 400) and Poland (369 300).

On average in the EU, women who gave birth to their first child in 2015 were aged nearly 29 (28.9 years). Across Member States, first time mothers were the youngest in Bulgaria and the oldest in Italy.

Overall, the total fertility rate in the EU increased from 1.46 in 2001 to 1.58 in 2015. It varied between Member States from 1.31 in Portugal to 1.96 in France in 2015.

A total fertility rate of around 2.1 live births per woman is considered to be the replacement level in developed countries: in other words, the average number of live births per woman required to keep the population size constant without migration.

Total fertility rate below the replacement level of 2.1 in all Member States

In 2015, France (1.96) and Ireland (1.92) were the two Member State with total fertility rates closest to the replacement level of around 2.1. They were followed by Sweden (1.85) and the United Kingdom (1.80).

Conversely, the lowest fertility rates were observed in Portugal (1.31), Cyprus and Poland (both 1.32), Greece and Spain (both 1.33) as well as Italy (1.35).

In most Member States, the total fertility rate rose in 2015 compared with 2001. The largest increases were observed in Latvia (from 1.22 in 2001 to 1.70 in 2015, or +0.48), the Czech Republic (+0.42), Lithuania (+0.41), Slovenia (+0.36), Bulgaria (+0.32), Romania (+0.31), Sweden (+0.28) and Estonia (+0.26).

In contrast, the highest decreases were registered in Cyprus (-0.25), Luxembourg (-0.19) and Portugal (-0.14).

For the EU as a whole, the total fertility rate increased from 1.46 in 2001 to 1.58 in 2015 (+0.12).

First time mothers youngest in Bulgaria, Romania and Latvia, oldest in Italy and Spain.

In 2015, the mean age of women at birth of their first child stood at 27 or below in Bulgaria (26.0), Romania (26.3), Latvia (26.5) and Poland (27.0).

In contrast, this age was above 30 in Italy (30.8), Spain (30.7), Luxembourg and Greece (both 30.2).

Highest growth in number of births over last 15 years in Sweden, largest drop in Portugal.

In the EU, 40 217 more babies were born in 2015 than in 2001 (+0.8%). Across Member States, the largest relative increases were in Sweden (+25.6%), the Czech Republic (+22.1%), Slovenia (+18.1%) and the United Kingdom (+16.1%).

In contrast, the highest decrease was in Portugal (-24.2%), followed by the Netherlands (-15.8%), Denmark (-11.1%), Romania (-10.4%) and Greece (-10.2%).


 

Baby boomers 1, 2 and 3

February 27, 2017

There are really 3 groups of baby boomers who are apparent since 1900.

baby boomers

baby boomers

BB1 – 1919 – 1928 (after World War 1)

BB2 – 1937 -1972 (after Great depression + World War 2 + children of BB1)

BB3 – 1977 -1998 (Children of BB2)


 

Hans Rosling — RIP

February 7, 2017

Hans Rosling passed away today. He was born July 27, 1948 and was just 68.

He was, I think, to be compared with Richard Feynman for his ability to communicate difficult concepts to laypeople.

RIP.

From Gapminder:

Sad to announce: Hans Rosling passed away this morning

We are extremely sad to announce that Professor Hans Rosling died this morning. Hans suffered from a pancreatic cancer which was diagnosed one year ago. He passed away early Tuesday morning, February 7, 2017, surrounded by his family in Uppsala, Sweden.

Eleven years ago, the three of us, Hans Rosling, Ola Rosling & Anna Rosling Rönnlund founded Gapminder. In 2007 Hans decided to “drop out” of university to work only 5% as professor at Karolinska Institute. That was a great decision. The 95% he worked for Gapminder made him a world famous public educator, or Edutainer as he liked to call it.

Across the world, millions of people use our tools and share our vision of a fact-based worldview that everyone can understand. We know that many will be saddened by this message. Hans is no longer alive, but he will always be with us and his dream of a fact-based worldview, we will never let die!

We kindly ask you to respect our need for privacy during this sad time of mourning. Gapminder will announce info about memorial plans later.

Stay updated on Gapminder’s twitter and facebook

— Anna R. Rönnlund & Ola Rosling, Co-founders of Gapminder

For more info, please contact Karolinska Institutet.


 

Sweden’s population will exceed 10 million today

January 20, 2017

The Swedish population will pass 10 million later today.

In 1969, 8 million people lived in Sweden. It took 35 years before the population passed 9 million in 2004. But only 13 years later, sometime in the first quarter of 2017, we will be more than 10 million inhabitants. Rapid growth will continue in the coming decades and we can be 12 million already by 2040.

The Swedish Central Bureau of Statistics has a population clock running on its website, and at 0700 on Friday 20th January 2017 reads:

sweden-population-clock

Swedish population clock at 0700, 20170120

It should reach 10 million by around noon.


UPDATE: 10am, 20th January 2017:

20170120 1000

20170120 1000


The population increase in the last 50 years has been quite “healthy” and robust in demographic terms.

Sweden Population - SCB

Sweden Population – SCB

In Europe, Sweden has perhaps the most robust development of demographics with respect to the ratio of non-working (under 19 and over 65) to working population (20 -65). And that has been thanks, in spite of falling fertility rates, mainly to immigration and the slightly higher fertility rate among newcomers (though that comes down quickly to the prevailing rate). Currently around 17% of Sweden’s population was born outside Sweden. This will increase to be over 20% by 2040.

The Swedish pensions system is less under pressure than in Southern and Eastern Europe. Even Germany and France and the UK have a somewhat lower pensions risk because of net immigration. However in all these countries an increase of the regular pension age from 65 to 70 can be expected before 2040.


 

The average age of all humans alive is about 32 years (and increasing)

December 23, 2016

The average age (mean not median) is about 32 years in 2016 and is increasing by about 1 month every year ( about 1 year per decade). It will be almost 42 years by 2100.

graphic by The Economist

graphic by The Economist

The median age (50% of population greater than this age) is 30.1 years in 2016 (male: 29.4 years,
female: 30.9 years). The median age is growing just a little faster than the average age as global fertility declines and will be about 37 by 2050.

graphic by Pew Research

graphic by Pew Research


 


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